USD/CHF continues to climb past 0.9650, hitting one-month highs ahead of US data.

  • USD/CHF gains traction for the seventh day in a row and jumps to a one-month high.
  • Recovering risk sentiment undermines CHF safe haven and offers support.
  • The Fed’s aggressive expectations act as a tailwind for the dollar and favor bullish traders.

The pair USD/CHF extends its bullish movement for the seventh consecutive day on Tuesday and rises to more than a month during the middle of the European session. The pair is currently sitting comfortably above the horizontal resistance at 0.9650 and looks poised for further appreciation.

A modest recovery in global risk sentiment – as evidenced by a positive turn in equity markets – appears to undermine the safe-haven Swiss franc. This, coupled with the underlying bullish tone surrounding the US dollar, favors bullish traders and supports prospects for an extension of the recent rally from the 0.9370 area, or the monthly low.

Despite signs of easing in US inflation, investors seem convinced that the Federal Reserve will stick with its policy tightening and have been pricing in at least a 50 basis point rate hike in September. Bets were bolstered by recent comments from several Fed officials and FOMC minutes indicating that the US central bank will continue to raise rates to control inflation.

However, the decline in US Treasury yields appears to deter dollar bulls from making further bets, especially after the recent rally to a two-decade high. This could limit the gains of the USD/CHF pair. That said, a sustained break of the previous monthly high, around the 0.9650 area, suggests that the path of least resistance is to the upside.

Market participants now await the US economic docket, in which PMI data, new home sales and the Richmond manufacturing index will be released. This, coupled with US bond yields, could influence the dollar price dynamics and provide some momentum to the USD/CHF pair. Traders will follow signals from broader risk sentiment to take advantage of short-term opportunities.

Technical levels

USD/CHF

Panorama
Last Price Today 0.9687
Today’s Daily Change 0.0046
Today’s Daily Change % 0.48
Today’s Daily Opening 0.9641
Trends
20 Daily SMA 0.9539
50 Daily SMA 0.9635
100 Daily SMA 0.965
200 Daily SMA 0.9443
levels
Previous Daily High 0.9659
Previous Daily Minimum 0.9574
Previous Maximum Weekly 0.9598
Previous Weekly Minimum 0.9409
Monthly Prior Maximum 0.9886
Previous Monthly Minimum 0.9502
Daily Fibonacci 38.2% 0.9626
Daily Fibonacci 61.8% 0.9606
Daily Pivot Point S1 0.959
Daily Pivot Point S2 0.954
Daily Pivot Point S3 0.9506
Daily Pivot Point R1 0.9676
Daily Pivot Point R2 0.971
Daily Pivot Point R3 0.9761

Source: Fx Street

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